Arizona enacted new congressional and legislative districts on Jan. 24, 2022, after the state’s independent redistricting commission transmitted the maps to the secretary of state. Arizona was apportioned nine seats in the U.S. House of Representatives after the 2020 census, the same number it received after the 2010 census. The state also has 30 legislative districts, each of which elects one senator and two representatives.
The redistricting commission originally approved the maps on Dec. 22, 2021. Members unanimously approved the congressional lines and voted 3-2 in favor of the legislative plan with nonpartisan Chairwoman Erika Neuberg joining the two Republican members—David Mehl and Douglas York—in support and the two Democratic members—Shereen Lerner and Derrick Watchman—opposed.
Following their approval, the maps entered a review period during which time towns and counties could suggest minor administrative edits. On Jan. 18, the commission reconvened to discuss incorporating those edits and to certify the maps. The commission voted 3-2 to certify the congressional map on Jan. 18 and 3-2 in favor of the legislative map on Jan. 21 with Neuberg, Mehl, and York voting in support both times and Lerner and Watchman opposed.
At the time of the congressional map’s enactment, Democrats held five U.S. House seats in Arizona and Republicans held four. The Arizona Republic’s Ray Stern wrote, “The new map, should it withstand legal challenges, favors Republicans in five — and possibly six — of the state’s nine districts.”
In a statement, the Arizona Democratic Party said, “Chair Neuberg … abandoned her role as nonpartisan arbiter … [and] has been an active participant in the Republican Commissioners’ efforts to achieve a warped congressional map so gerrymandered, it might as well have been drawn by a Republican legislature.”
Neuberg said her vote in favor “stemmed from fundamental differences and understanding on constitutional responsibilities as it related to redistricting.” Commissioner Mehl said, “I think this map is a terrific map for the state of Arizona … This map really represents what we heard from the public and what we see in the constitution.”
With the legislative map, the Arizona Mirror’s Jeremy Dude wrote, “The final map has 13 Republican districts, 12 Democratic ones and five that would be considered competitive … Four of those five competitive districts lean toward the GOP.”
Following the Dec. 22 meeting when the final maps were initially approved, Commissioner Lerner said, “I think there’s always going to be partisanship. But I feel the partisanship exceeded my expectations.” Neuberg referenced the competitive districts saying, “[T]hese maps will further encourage elected leaders to pay attention to their constituents.”
As of Jan. 25, 25 states have adopted congressional district maps and 29 have adopted legislative lines. Congressional redistricting has been completed for 271 of the 435 seats (62.3%) in the U.S. House. Legislative redistricting has been completed for 3,992 of the 7,383 state legislative seats (54.1%).
Economy and Society is Ballotpedia’s weekly review of the developments in corporate activism; corporate political engagement; and the Environmental, Social, and Corporate Governance (ESG) trends and events that characterize the growing intersection between business and politics.
ESG Developments This Week
On Wall Street and in the private sector
BlackRock CEO Larry Fink on ESG
Last week, BlackRock CEO Larry Fink’s wrote his annual letter to fellow CEOs. This year’s letter was adamant about the importance of ESG, stakeholder capitalism, and sustainable investing but was also something of a response to critics. The CEO of the world’s largest asset management firm—now with officially more than $10 trillion in client assets under management—argued that sustainability is a financial, not political, value and that, in his view, stakeholder capitalism is capitalism at its finest. About stakeholders, he wrote the following:
“Over the past three decades, I’ve had the opportunity to talk with countless CEOs and to learn what distinguishes truly great companies. Time and again, what they all share is that they have a clear sense of purpose; consistent values; and, crucially, they recognize the importance of engaging with and delivering for their key stakeholders. This is the foundation of stakeholder capitalism.
Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not “woke.” It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.
In today’s globally interconnected world, a company must create value for and be valued by its full range of stakeholders in order to deliver long-term value for its shareholders. It is through effective stakeholder capitalism that capital is efficiently allocated, companies achieve durable profitability, and value is created and sustained over the long-term. Make no mistake, the fair pursuit of profit is still what animates markets; and long-term profitability is the measure by which markets will ultimately determine your company’s success.”
About sustainability, Fink wrote the following:
“Most stakeholders – from shareholders, to employees, to customers, to communities, and regulators – now expect companies to play a role in decarbonizing the global economy. Few things will impact capital allocation decisions – and thereby the long-term value of your company – more than how effectively you navigate the global energy transition in the years ahead.
It’s been two years since I wrote that climate risk is investment risk. And in that short period, we have seen a tectonic shift of capital. Sustainable investments have now reached $4 trillion. Actions and ambitions towards decarbonization have also increased. This is just the beginning….
We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients. That requires understanding how companies are adjusting their businesses for the massive changes the economy is undergoing. As part of that focus, we are asking companies to set short-, medium-, and long-term targets for greenhouse gas reductions. These targets, and the quality of plans to meet them, are critical to the long-term economic interests of your shareholders.”
About his position that BlackRock and others must continue investing in fossil fuels and traditional energy companies while the global economy makes the transition to zero-carbon, he argued the following:
“The transition to net zero is already uneven with different parts of the global economy moving at different speeds. It will not happen overnight. We need to pass through shades of brown to shades of green. For example, to ensure continuity of affordable energy supplies during the transition, traditional fossil fuels like natural gas will play an important role both for power generation and heating in certain regions, as well as for the production of hydrogen….
As we pursue these ambitious goals – which will take time – governments and companies must ensure that people continue to have access to reliable and affordable energy sources. This is the only way we will create a green economy that is fair and just and avoid societal discord. And any plan that focuses solely on limiting supply and fails to address demand for hydrocarbons will drive up energy prices for those who can least afford it, resulting in greater polarization around climate change and eroding progress.
Divesting from entire sectors – or simply passing carbon-intensive assets from public markets to private markets – will not get the world to net zero. And BlackRock does not pursue divestment from oil and gas companies as a policy. We do have some clients who choose to divest their assets while other clients reject that approach. Foresighted companies across a wide range of carbon intensive sectors are transforming their businesses, and their actions are a critical part of decarbonization. We believe the companies leading the transition present a vital investment opportunity for our clients and driving capital towards these phoenixes will be essential to achieving a net zero world.”
Finally, in response to critics who charge that Fink’s ESG goals are to advance his own political agenda and, thereby, to disenfranchise voters who might otherwise be expected to make the decisions about the climate and other policy matters, Fink aims to flip the switch, arguing rather that he’s trying to allow every voice to be heard:
“[W]e are pursuing an initiative to use technology to give more of our clients the option to have a say in how proxy votes are cast at companies their money is invested in. We now offer this option to certain institutional clients, including pension funds that support 60 million people. We are working to expand that universe….
We know there are significant regulatory and logistical hurdles to achieving this today, but we believe this could bring more democracy and more voices to capitalism. Every investor deserves the right to be heard. We will continue to pursue innovation and work with other market participants and regulators to help advance this vision toward reality.”
ESG opponent responses
Scott Shepard, the Director of the Free Enterprise Project at the National Center for Public Policy Research, which bills itself as the only full-service shareholder activist group defending traditional shareholder-business relations, wrote the following in response:
“We have reviewed Larry Fink’s 2022 letter to you and your peers, and we have reached two conclusions. Larry Fink doesn’t think that you as CEO or we as shareholders are very bright, or he wouldn’t make so many glaringly false assertions. And because of this, you will lead your company into true mountains of risk – reputational, legal, regulatory, legislative, and more – if you follow his lead.
Over the course of his fairly brief letter, Fink reveals that he doesn’t understand (or pretends not to understand) capitalism. He makes overtly absurd claims about the non-partisan nature of his demands to the corporations in which his clients have invested. He misunderstands his fiduciary duty. And he fails to recognize that his vision for the future is already failing, in the United States and all around the world.
It’s probably not fair to say that your fiduciary duty to your shareholders and your moral duties to other relevant parties require you to reject everything that Larry Fink says. But it is certainly true that you cannot simply rely on anything he says without undertaking your own full, objective, independent investigation.”
At National Review’s “Capital Matters” newsletter/online section, Andrew Stuttaford picks up the theme of misunderstanding or adopting what is referred to in the piece as the “wrong kind of capitalism”:
“CEOs clearly know how to talk the talk to an important investor. There’s nothing wrong with that. What is worrying is that more and more of them have actually come to believe in its more malign aspects. Why? They, and many of their colleagues in the C-suite, have realized that, in a regime where stakeholder, rather than shareholder, capitalism is the dominant ethos in the “private” sector, their rewards will be less dependent on delivering value to shareholders (who can be a demanding bunch) than in the past. Rather, they will be expected to pay increased attention to the somewhat nebulously defined aspirations of their almost as nebulously defined stakeholders. In practice, that means putting “their” companies’ capital, and the power that comes with it, behind a social, political, and economic agenda set by the state, various interest groups (unions, say, or NGOs, to take two examples), and, yes, business, a set-up that may not only offer them a pathway to (in many cases, even more) wealth but also to a degree of political power. And the latter comes with the advantage that it is largely free of conventional democratic control. That’s how corporatism works — and stakeholder capitalism is, as I have argued many (!) times before, a form of corporatism.”
At the Competitive Enterprise Institute, Richard Morrison wonders if Fink might be attempting to walk-back some of his previous rhetoric:
Larry Fink and his team at BlackRock seem to have heard the growing roar of opposition to politicized investing that is emerging in the United States. While his 2022 public letter to CEOs features a heavy focus on climate change and decarbonization (as in years past), it opens with a defensive insistence that the company’s approach to stakeholder capitalism is not political or “woke.” Such a statement would not be necessary if Fink and his allies were not feeling the heat from shareholder activists opposed to the embrace of progressive-left social policies that, contra Fink’s insistence, are inherently political.
The rhetorical backpedaling is even apparent on Fink’s own favorite topic—climate. Over the past year, skeptics of climate policy (including the policy of a net-zero target for greenhouse gas emissions), have highlighted the problems with the aggressive policy path we see in, for example, the European Union. Energy reliability is falling and energy prices are skyrocketing. Traditional energy sources are being phased out without sufficient baseload capacity being developed to replace them.
This year’s letter—which seems like a response to such criticisms—contains several caveats that climate activists generally prefer not to acknowledge. Fink writes that, “green products often come at a higher cost today,” and acknowledges that “traditional fossil fuels like natural gas will play an important role” during the future energy transition, and that “governments and companies must ensure that people continue to have access to reliable and affordable energy sources.” Refusing to address continuing demand for fossil fuels “will drive up energy prices for those who can least afford it.” That’s a far more reasonable approach than the investing public has generally seen from institutions that place climate change at the top of their list of priorities.
In the States
Pushback against ESG in the states
In last week’s edition of this newsletter, we covered issues facing banks in Texas, some of whom claim, for marketing purposes, to be against investing in oil and guns but also claim, for the purposes of compliance with a new state law, that they do not discriminate in lending arrangements against oil and gas.
The aforementioned Texas law is not the only move being taken by governments against asset managers and banks that are, in their view, allegedly playing politics. Most notably, West Virginia State Treasurer Riley Moore announced last week that the state will no longer use a BlackRock investment fund “based on recent reports that BlackRock has urged companies to embrace “net zero” investment strategies”:
“State Treasurer Riley Moore on Monday announced the Board of Treasury Investments, which manages the state’s roughly $8 billion operating funds, will no longer use a BlackRock Inc. investment fund as part of its banking transactions.
Treasurer Moore said the decision was based on recent reports that BlackRock has urged companies to embrace “net zero” investment strategies that would harm the coal, oil and natural gas industries.
“As the state’s chief financial officer and chairman of the Board of Treasury Investments, I have a duty to ensure that taxpayer dollars are managed in a responsible, financially sound fashion which reflects the best interests of our state and country, and I believe doing business with BlackRock runs contrary to that duty,” Treasurer Moore said.
Treasurer Moore said this action is consistent with his belief that the state should not do business with firms whose corporate policies directly threaten West Virginians’ interests and livelihoods.
“BlackRock CEO Larry Fink has been outspoken in pressuring corporate leaders to commit to investment goals that will undermine reliable energy sources like coal, natural gas and oil under the guise of helping the planet,” Treasurer Moore said.”
Mississippi enacted new congressional districts on Jan. 24 when Gov. Tate Reeves (R) signed the state’s congressional redistricting plan. Mississippi was apportioned four seats in the U.S. House of Representatives after the 2020 census, the same number it received after the 2010 census. This map will take effect for Mississippi’s 2022 congressional elections.
The state House of Representatives approved the plan, 75-44, on Jan. 6 with 73 Republicans, one Democrat, and one independent voting in favor and 41 Democrats, two Republicans, and one independent voting against. The state Senate approved the new congressional map, 33-18, on Jan. 12 with all votes in favor by Republicans and 16 Democrats and two Republicans voting against.
After the state Senate approved the plan, Lee Sanderlin wrote in the Mississippi Clarion Ledger, “The bill preserves the current balance of congressional power in Mississippi, keeping three seats for Republicans and one for lone Democrat Bennie Thompson, D-Bolton.”
As of Jan. 24, 26 states had adopted congressional district maps, two states have approved congressional district boundaries that have not yet taken effect, one state’s map was struck down by the state supreme court, six states were apportioned one congressional district (so no congressional redistricting is required), and 15 states have not yet adopted congressional redistricting plans after the 2020 census. As of Jan. 24, 2012, 32 states had enacted congressional redistricting plans.
Congressional redistricting has been completed for 278 of the 435 seats (63.9%) in the U.S. House of Representatives.
Kentucky enacted new congressional districts on Jan. 20 when the general assembly overrode Gov. Andy Beshear’s (D) veto of legislation establishing the state’ new congressional map. Beshear vetoed Senate Bill 3 —the congressional redistricting legislation —on Jan. 19. Kentucky was apportioned six seats in the U.S. House of Representatives after the 2020 census, the same number it received after the 2010 census. This map will take effect for Kentucky’s 2022 congressional elections.
The vote to override the governor’s veto was 26-8 in the state Senate with 23 Republicans and three Democrats in favor and five Democrats and three Republicans opposed. The override vote was 64-24 in the state House, with all votes in favor by Republicans and 21 Democrats and three Republicans voting to sustain Beshear’s veto. Republicans have a majority in both chambers of the Kentucky General Assembly.
Senate Bill 3 was introduced in the Kentucky State Senate on Jan. 4. The Senate voted 28-4 in favor of the map on Jan. 6 followed by the House voting 65-25 in favor on Jan. 8.
Greg Giroux of Bloomberg Government wrote that the “congressional map [is] designed to preserve a 5–1 Republican advantage in Kentucky’s U.S. House delegation.” Giroux added, “The map most notably boosts Rep. Andy Barr (R), whose central 6th District in and around Lexington will become more Republican-friendly in part by transferring the state capital of Frankfort to the western 1st District of Rep. James Comer (R).”
As of Jan. 21, 25 states have adopted congressional district maps, two states have approved congressional district boundaries that have not yet taken effect, one state’s map was struck down by its state supreme court, six states were apportioned one congressional district (so no congressional redistricting is required), and 16 states have not yet adopted new congressional maps. As of Jan. 21 in 2012, 32 states had enacted congressional redistricting plans.
States have completed congressional redistricting for 274 of the 435 seats (63.0%) in the U.S. House of Representatives.
Kentucky adopted new state House district boundaries on Jan. 20 after the general assembly overrode Gov. Andy Beshear’s (D) veto of the plan. The vote to override the governor’s veto was 24-10 in the state Senate with all votes in favor by Republicans and eight Democrats and two Republicans voting against. The override vote was 69-23 in the state House, with all votes in favor by Republicans and 22 Democrats and one Republican voting to sustain Beshear’s veto.
Gov. Beshear allowed the redistricting proposal for new state Senate districts to become law without his signature on Jan. 21. That legislation had passed the state Senate on Jan. 6, 28-4, and the state House on Jan. 8, 67-23. The maps for both chambers will take effect for Kentucky’s 2022 state legislative elections.
Ryland Barton of National Public Radio affiliate WFPL wrote that “The House map further divides several urban areas in the state and connects them with rural districts in surrounding areas.” Steve Rogers of WTVQ wrote that “During debate on the legislative districts, especially the 100 House districts, Democrats objected that the GOP-drawn map unfairly split urban areas to the benefit of Republicans. The bill recasting the Senate’s 38 districts easily cleared the Senate, with a handful of lawmakers objecting.”
As of Jan. 21, 28 states have adopted legislative district maps for both chambers, one state has adopted maps that have not yet gone into effect, one state’s enacted maps were overturned by its state supreme court, and 20 states have not yet adopted legislative redistricting plans after the 2020 census. As of Jan. 21, 2012, 34 states had enacted legislative redistricting plans after the 2010 census.
Nationwide, legislative redistricting has been completed for 1,187 of 1,972 state Senate seats (60.2%) and 2,715 of 5,411 state House seats (50.2%).
On Jan. 20, 2022, U.S. Rep. Alexandria Ocasio-Cortez (D-N.Y.) endorsed Jessica Cisneros in the Democratic primary for Texas’ 28th Congressional District. On Jan. 19, House Majority Whip Steny Hoyer (D-Md.) endorsed incumbent Henry Cuellar.
Cuellar, Tannya Benavides, and Cisneros are running in the primary election on March 1. If no candidate receives a majority of the vote, the top-two vote-getters will advance to a primary runoff on May 24.
In the 2020 Democratic primary, Cuellar defeated Cisneros 51.8% to 48.2%. In that primary, Cisneros received endorsements from Justice Democrats, Sen. Bernie Sanders, Rep. Pramila Jayapal, and Rep. Alexandria Ocasio-Cortez. Cuellar received endorsements from House Speaker Nancy Pelosi and the chair of the Democratic Congressional Campaign Committee. Political commentators expect endorsements in this year’s race to continue to reflect this divide between the wings of the Democratic Party.
The general election will take place on Nov. 8, 2022. As of January 2022, the three race rating outlets considered the general either to be either Solid Democratic or Likely Democratic. The district is one of three in the state announced as targets by the National Republican Congressional Committee in February 2021. In the 2020 general election. Cuellar defeated Sandra Whitten (R) 58.3% to 39.0%.
Between Jan. 12 and Jan. 19, officials in at least seven states either proposed, advanced, or enacted new redistricting maps.
Connecticut: On Jan. 18, Nathaniel Persily, the special master who the state supreme court appointed to handle redistricting, submitted his proposed map and report for the state’s congressional districts. The state supreme court chose Persily, a law professor at Standford University, to manage congressional redistricting after the Connecticut Reapportionment Commission did not meet its court-ordered deadline to finish redrawing the congressional map. The court has until Feb. 15 to approve new congressional district lines.
The Connecticut General Assembly is responsible for redistricting every cycle but has not produced new maps since 1981. In 1991, 2001, 2011, and 2021, the legislature missed its mid-September deadline to enact maps, passing authority to the commission each cycle. The commission itself has missed its deadlines three cycles in a row: 2001, 2011, and 2021. In each cycle, the supreme court granted a three-week extension. The commission adopted maps before the extended deadline in 2001 but missed the extension in 2011 and 2021, at which point authority passes to the supreme court. Persily served as the redistricting special master during the 2010 redistricting cycle, as well.
Florida: On Jan. 16, Ryan Newman, general counsel to Gov. Ron DeSantis (R), submitted a proposed congressional map on the governor’s behalf. Politico’s Gary Fineout wrote that this was the first time in recent history that the governor has proposed a map during Florida’s redistricting process. Fineout added that the proposal would halve the number of majority-minority districts from four to two and increase the number of likely Republican districts to 18 from 16.
On Jan. 18, WKMG’s Christie Zizo wrote that the Senate Redistricting Committee had not considered DeSantis’ proposed map. Zizo added, “Once the Florida House and Senate agree on a final new Congressional district map, it will go to DeSantis for his signature. The DeSantis statement indicates he may veto the map if he does not agree with it.”
Arizona: On Jan. 18, the Arizona Independent Redistricting Commission met to finalize the congressional and legislative maps the commission approved on Dec. 22, 2021. This meeting was held to address administrative edits that towns and counties requested on issues like aligning precinct boundaries. The commission voted 3-2 to finalize the congressional map. Members began to discuss the legislative map but had to adjourn the meeting before holding a final vote after Chairwoman Erika Neuberg left the meeting for unknown reasons and did not return. The commission was set to meet again on Jan. 21 to finish the certification. These maps will not go into effect until the commission transmits them to the secretary of state.
Pennsylvania: The Pennsylvania House of Representatives voted 110-91 in favor of a proposed congressional map on Jan. 12, sending the plan to the Senate for approval. On Jan. 18, a Senate committee voted to advance the map to the full Senate for a vote. If the Senate approves the map, it will go to Gov. Tom Wolf (D) for final approval. Wolf has indicated that he opposes the map on partisan lines but has not said whether he will veto it if it arrives at his desk. Pennsylvania has a divided government with Republicans controlling both chambers of the legislature and Democrats holding the governorship.
Rhode Island: The Rhode Island Special Commission on Reapportionment voted 13-4 in favor of new legislative maps and 15-2 in favor of congressional lines on Jan. 12. While the commission may endorse district lines, its decisions are not binding. The maps will now advance to the Democratic-controlled General Assembly, which may “adopt, modify, or ignore the commission’s proposals.”
South Carolina: On Jan. 19, the Republican-controlled Senate Judiciary Committee voted 13-8 along party lines in favor of a congressional map plan. The Post and Courier’s Nick Reynolds wrote that the map would give Republicans a 6-1 advantage in U.S. House seats and that the plan would create no competitive districts. This map originated in the House and passed there with a 74-35 vote on Jan. 13. It will next advance to the full Senate for a vote. If the Senate supports the proposal, it will go to Gov. Henry McMaster (R) for final approval.
One state—Arkansas—enacted a congressional map between Jan. 12 and Jan. 19. As of Jan. 19, 24 states have enacted congressional districts maps and 27 have enacted legislative district lines.
The Checks and Balances Letter delivers news and information from Ballotpedia’s Administrative State Project, including pivotal actions at the federal and state levels related to the separation of powers, due process and the rule of law.
In this month’s edition of Checks and Balances, we review the latest judicial actions on the Biden administration’s vaccine mandates; a circuit split on the constitutionality of removal protections for certain administrative law judges that could prompt the U.S. Supreme Court (SCOTUS) to weigh in; new federal legislation seeking to codify Chevron deference; and the Office of Personnel Management’s (OPM) proposed rescission of Trump-era policies regarding poor-performing federal employees.
At the state level, we take a look at opposition from state attorneys general to the Biden administration’s vaccine and mask requirements for federal Head Start programs.
We also highlight the release of the Biden administration’s Fall 2021 Unified Agenda of Federal Regulatory and Deregulatory Actions. As always, we wrap up with our Regulatory Tally, which features information about the 2,094 proposed rules and 3,257 final rules added to the Federal Register in 2021 and OIRA’s regulatory review activity.
SCOTUS, courts of appeal issue rulings on vaccine mandates
What’s the story?
The U.S. Supreme Court on January 13, 2022, blocked the Biden administration’s coronavirus (COVID-19) vaccination requirements for certain private businesses while upholding the vaccine mandate for healthcare workers. The vaccine requirements for federal contractors remained blocked nationwide as of January 14, 2022.
Private businesses: The U.S. Supreme Court ruled 6-3 to block enforcement of the Occupational Safety and Health Administration’s (OSHA) regulation implementing a vaccine requirement for workers at businesses with 100 or more employees. In the per curiam opinion, the majority justices argued that the OSHA secretary lacked the authority to issue the requirement, describing the rule as “a significant encroachment into the lives—and health—of a vast number of employees.”
In his concurrence, Justice Gorsuch argued in part that the rule failed the test of the major questions doctrine, which requires Congress to speak clearly when it grants an agency authority to regulate on economic or politically significant matters. “The agency claims the power to force 84 million Americans to receive a vaccine or undergo regular testing,” wrote Gorsuch. “By any measure, that is a claim of power to resolve a question of vast national significance. Yet Congress has nowhere clearly assigned so much power to OSHA.”
Healthcare workers: The U.S. Supreme Court ruled 5-4 to uphold the Centers for Medicare and Medicaid’s (CMS) vaccine requirement for healthcare workers at facilities that receive Medicaid or Medicare funds. In the per curiam opinion, the majority justices argued that “Congress has authorized the Secretary to impose conditions on the receipt of Medicaid and Medicare funds that ‘the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services.’”
Federal contractors: The United States Court of Appeals for the Eleventh Circuit on December 17, 2021, upheld a nationwide injunction blocking enforcement of the Biden administration’s vaccine requirement for federal contractors. A three-judge panel of the United States Court of Appeals for the Sixth Circuit on January 7, 2022, ruled 2-1 to uphold a similar injunction blocking the requirement for federal contractors in Kentucky, Ohio, and Tennessee. “If the president can order medical interventions in the name of reducing absenteeism,” questioned the majority, “what is the logical stopping point of that power?”
Circuit split could prompt SCOTUS to hear challenge to ALJ removal protections
What’s the story?
The United States Court of Appeals for the Fifth Circuit on December 13, 2021, issued an en banc opinion in Cochran v. U.S. Securities & Exchange Commission (SEC) et al., holding 9-7 that federal law does not prohibit federal district courts from concurrently hearing constitutional challenges to the SEC’s administrative law judges (ALJs) in cases where the agency has yet to issue a final adjudicative order. The court’s decision creates a circuit split with six other courts of appeal that have already considered such challenges, which could prompt the U.S. Supreme Court to take up the case.
Cochran has argued that the removal protections of the SEC ALJ assigned to her case unconstitutionally insulate the ALJ from removal by the president. The district court ruled that, according to the Securities Exchange Act of 1934, Cochran must first raise her constitutional challenge during agency proceedings before appealing the final agency order to the federal courts. A panel of the Fifth Circuit agreed with the district court. The full Fifth Circuit heard the case and disagreed, finding in part that Cochran’s constitutional concern “has absolutely nothing whatsoever to do with a final order, and therefore her claim falls outside of” the statutory limit on the district court’s subject matter jurisdiction.
“In Free Enterprise Fund, the Supreme Court rejected the precise argument the SEC makes here—that the Exchange Act divests district courts of jurisdiction over removal power challenges,” wrote Judge Catharina Haynes in the opinion.
Judge Gregg Costa argued in the dissent, “Before today, every court of appeals to consider the question has answered that a person facing an SEC enforcement action may not mount a collateral attack against the agency proceeding in federal district court.” The majority, he further argued, “turns constitutional avoidance on its head by making separation-of-powers claims a first rather than last resort in resolving cases.”
The U.S. Supreme Court in 2018 ruled in a constitutional challenge to the appointment of the SEC’s ALJs. The court found in Lucia v. SEC that the SEC’s ALJs are Officers of the United States subject to the Appointments Clause.
U.S. Representative Pramila Jayapal (D-Wash.) on December 1, 2021, introduced the Stop Corporate Capture Act, which aims to enact broad changes to the regulatory process, including codification of the Chevron deference doctrine.
Chevron deference compels judges to defer to reasonable agency interpretations of statutes they are tasked with administering. The proposed legislation would codify Chevron deference, despite continued uncertainty among U.S. Supreme Court justices regarding the doctrine’s scope. “[A]ll nine justices have at least once signed an opinion explicitly holding that Chevron should not apply in a situation where the administrative law textbooks would previously have said that it must apply,” concluded administrative law scholar Michael Kagan in 2017.
In addition to codifying Chevron deference into law, the Stop Corporate Capture Act proposes instituting new requirements for material submitted during public comment periods, including new disclosure standards for scientific studies and new penalties for corporations found to have submitted “materially false, fictitious, or fraudulent” information. The legislation would also require agencies to prioritize regulations that offer the most benefits to the public, regardless of costs, and would allow agencies to reinstate rules repealed under the Congressional Review Act, among other provisions.
OPM moves to rescind Trump-era policy on poor-performing federal employees
What’s the story?
The Office of Personnel Management (OPM) on January 4, 2022, issued a proposed rule aimed at rescinding regulations issued under the Trump administration regarding poor-performing federal employees.
OPM issued the rules in November 2020 pursuant to President Donald Trump’s (R) Executive Order 13839, which aimed to streamline the discipline and dismissal processes for poor-performing federal employees. The regulations directed agency approaches to employee probationary and improvement periods, barred agencies from entering into settlement agreements with employees, and shortened the time frame for employees to respond to allegations of misconduct or poor performance.
President Joe Biden (D) on January 22, 2021, issued Executive Order 14003, rescinding E.O. 13839 and directing OPM to repeal the Trump-era regulations. In its proposed rule to implement Biden’s directive, OPM argued that the rules “removed previous flexibilities enjoyed by agencies in how to address performance issues with their employees.” The proposed rule is open for public comment through February 3, 2022.
States challenge coronavirus (COVID-19) requirements for federal Head Start programs
What’s the story?
Attorneys general in Florida, Texas, and Louisiana have opposed the Biden administration’s coronavirus (COVID-19)-related requirements for federal Head Start programs. The Department of Health and Human Services (HHS) on November 30, 2021, issued an interim final rule mandating vaccination for employees and contractors of federal Head Start programs and requiring masks for students ages two and older.
Texas Attorney General Ken Paxton and Lubbock Independent School District on December 10, 2021, filed a preliminary injunction to block enforcement of the rule. Louisiana Attorney General Jeff Landry followed suit on Dec. 21, filing a lawsuit arguing in part that the Head Start requirements exceed the authority of the executive branch. Attorneys general from 23 other states joined Landry’s lawsuit.
Judge James Wesley Hendrix of the United States District Court for the Northern District of Texas on December 31, 2021, blocked enforcement of the rule in Texas, arguing in part that Congress did not delegate authority to HHS to issue vaccine or mask requirements for Head Start programs. The next day, Judge Terry Doughty of the United States District Court for the Western District of Louisiana blocked enforcement of the rule in Louisiana and 23 other states.
“This Court has no hesitation in finding that the Head Start Mandate is a decision of vast economic significance and that Congress has not clearly spoken to give Agency Defendants the authority to impose it,” wrote Doughty in the order.
Biden administration releases Fall 2021 Unified Agenda
The Biden administration in December released the Fall 2021 Unified Agenda of Federal Regulatory and Deregulatory Actions—a semiannual publication of recently completed, ongoing, and anticipated federal regulations. The Unified Agenda combines regulatory agendas and other required reports and information from approximately 60 departments, agencies, and commissions of the federal government.
“The regulatory plans and agendas submitted by agencies and included here offer blueprints for how the Administration plans to continue delivering on the President’s agenda as we build back better,” stated the Office of Information and Regulatory Affairs in the document’s introduction. “We are proud to shine a light on the regulatory agenda as a way to share with the public how the themes of equity, prosperity and public health cut across everything we do to improve the lives of the American people.”
The Fall 2021 Unified Agenda identifies 68 federal agencies tasked with 3,777 rules in the active, just-completed, and long-term stages, according to an analysis in Forbes.
The Federal Register in 2021 reached 74,532 pages.
The 2021 Federal Register included 2,094 proposed rules and 3,257 final rules.
The 2021 Federal Register ranks as the second-lowest final rule count since the 1970s. The lowest final rule count since the 1970s was 2,964 final rules issued in 2019.
A total of 309 significant documents were added to the Federal Register in 2021, including 129 proposed rules, 176 final rules, and four notices. In comparison, the Trump administration added 109 significant documents in 2020 and 121 significant documents in 2019.
Arkansas enacted new congressional districts on Jan. 14 after the statutes establishing the map went into effect without Gov. Asa Hutchinson’s (R) signature. Arkansas was apportioned four seats in the U.S. House of Representatives after the 2020 census, the same number it received after the 2010 census. This map will take effect for Arkansas’ 2022 congressional elections.
The Republican-controlled Arkansas General Assembly approved the map on Oct. 6, 2021, voting in favor of two separate yet identical bills and sending them to Hutchinson for approval. On Oct. 13, Hutchinson announced he would not sign the map into law, questioning the division of specific counties. Instead, Hutchinson let them go into effect without his signature. On Nov. 4, Attorney General Leslie Rutledge (R) released a legal opinion establishing Jan. 14 as the map’s effective date.
Under the new map, two of the state’s counties will be split between multiple congressional districts: Sebastian County, which is split in two, and Pulaski County—the state’s most populous—split between three districts.
Opponents of the map said the division of Pulaski County, where less than 50% of the population identifies as white alone, was conducted along partisan and racial lines. Little Rock NAACP Chapter President Dianne Curry (D) said, “This is an embarrassment to the state of Arkansas to know in the 21st century we’re dealing with blatant discrimination.”
Supporters of the map said the county’s size and location in the center of the state necessitated its split so as to lower the total number of counties being split elsewhere. Arkansas GOP Chairwoman Jonelle Fulmer (R) said, “The new congressional districts are compact and keep community interests together. These lines are largely consistent with the existing lines, which were drawn by Democrats in 2010.”
As of Jan. 14, 25 states have adopted new congressional maps, one has approved boundaries that have not yet taken effect, six were apportioned one congressional district, and 18 states have not yet adopted new congressional maps. As of Jan. 14 in 2011, 31 states had enacted congressional redistricting plans.
States have completed congressional redistricting for 274 of the 435 seats (63.0%) in the U.S. House of Representatives.
The Iowa Department of Workforce Development issued a rule on January 10, 2022, that doubled the number of work search activities claimants have to conduct weekly from two to four. Work search activity refers to the requirement that an individual engages in documented efforts to search for work while receiving benefits through unemployment insurance. The rule also reduced the number of qualifying work search activities from 27 to a narrower list of 12.
Unemployment insurance claimants have to respond to calls they receive from state career councilors and may have to meet with a counselor weekly to remain eligible for unemployment insurance benefits. Not all workers will have to meet with a career councilor under the policy, but all claimants have to respond if they are contacted.
Unemployment insurance is a joint federal and state program that provides temporary monetary benefits to eligible laid-off workers who are actively seeking new employment. Qualifying individuals receive unemployment compensation as a percentage of their lost wages in the form of weekly cash benefits while they search for new employment.
The federal government oversees the general administration of state unemployment insurance programs. The states control the specific features of their unemployment insurance programs, such as eligibility requirements and length of benefits.